This past week, many Canadians watched the U.S. presidential election with bated breath and the belief that whoever wins the presidency will directly affect their investments. However, this is typically not the case.
For example, while the S&P 500 produced one of its best runs during a first-term presidency under Trump, the S&P/TSX Composite Index saw significantly smaller returns in the same time frame. As a result, Canadian investors should not turn to U.S. elections for answers to their sluggish returns but rather bigger macroeconomic forces at play. To elucidate this point, The Chronicle Herald recently turned to Sightline Wealth Management Senior Vice President and Investment Advisor Paul de Sousa.
“I’m in the camp where it doesn’t really matter,” de Sousa tells the publication regarding who sits in the White House. Instead, Canadian investors should pay attention to factors that will likely have a large impact on TSX returns such as the composition of Canada’s markets, growing Canadian government debt and the depth of the current second (and a potential third) wave of the COVID-19 pandemic. However, no matter the specific forces at play, Canadian investors should always ensure that their portfolios are properly allocated and capable of achieving returns even in the most turbulent times.